DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD    Frequently-Asked-Questions About Closing         WHAT IS CLO...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD    Traditional versus    REO Transactions        Defaulted prop...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD      Buyer Representation              What buyers should know ...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD         Am I ready to buy a home?                   Your buyer’...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD          From Contract to Closing               Congratulations...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD       Moving Checklist             Moving into your new home is...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFDFair Housing Quiz                                               ...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD    Evolution of Buyer Representation    Even though buyer repre...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD            Property Disclosures          Buying a home can pres...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFDs        5 Reasons to Signe       a Buyer Representation Agreeme...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD    The Negotiating Process         You’ve found a home that’s r...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD       Customer or Client?ge     What’s the difference?         ...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD   What Do You Want     and Need in a Home?    Finding a new hom...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFDForeclosure DisclosureContinued from page 55.Are there exception...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD     Why Work with     an Accredited Buyer’s     Representative?...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD  Final Walk-through Checklist      GENERAL                     ...
DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD  5 Steps to Obtaining a Mortgage       Today’s stricter lending...
Upcoming SlideShare
Loading in …5
×

Resources For Lake Lanier Real Estate Buyers!

441 views

Published on

Resources for Lake Lanier real estate buyers courtesy of Arthur Prescott of Prudential Georgia Realty and REBAC, the Real Estate Buyer's Agent Council. Arthur Prescott is an ABR, Accredited Buyer's Representative. This is a list of common questions and answers regarding the process of purchasing homes and real estate in the Lake Lanier area.

Published in: Real Estate
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
441
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Resources For Lake Lanier Real Estate Buyers!

  1. 1. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Frequently-Asked-Questions About Closing WHAT IS CLOSING? WHAT DO I NEED TO BRING? Closing (also called settlement) is the legal transfer of Your ABR® can advise you on what you’ll need to bring property ownership. Usually, but not always, possession to closing, but typically buyers must provide: is transferred at closing. Sometimes the seller may ask to • Payment of closing costs close the sale but retain possession, and pay rent to the • Proof of insurance buyer until vacating the property at a later date. • Approval of inspections of the property WHO ATTENDS CLOSINGS? WHAT HAPPENS AT CLOSING? Face-to-face closings are common in most states, You’ll sign many documents. Rely on your buyer’s although a few states do not require them. Your ABR® rep and your attorney to review these documents and can provide details for your situation. The participants answer any questions you may have. Frequently-used usually include: documents include: • You, the buyer. Closing statement (HUD-1) – details all funds changing • The seller. hands between the buyer and seller • The real estate agents representing the buyer(s) Truth in Lending statement – a final summary of the and seller(s). terms of your loan • Attorneys for the buyer(s) and seller(s). Mortgage note – a legal obligation to repay the lender • The closing agent, the title insurance representative, according to stated terms and the escrow agent. Often one person fulfills all Deed of trust – the legal transfer of ownership; gives the three roles, coordinating and recording the exchange lender a claim against your home if you fail to meet the of the documents and money, disbursing funds, and terms of the mortgage note handling various closing details. Affidavits – any binding statements by the buyer WHERE IS CLOSING HELD? or seller Closings are usually held at a title company’s office. Riders – any contract amendments that impact Their job is to confirm the current legal owner of the your rights property, reveal any mortgages, liens, judgments Any additional documents required in your state. or unpaid taxes on the property, and identify any Once all documents are signed and all monies have restrictions that may affect the sale of the property. been paid, possession is transferred and you receive Any problems need to be corrected before a buyer can the keys to your new home. Be sure to keep your receive “good title.” closing documents in a safe place for future reference. Some of the expenses associated with your home purchase are tax-deductible. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.
  2. 2. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Traditional versus REO Transactions Defaulted properties are a sad fact of the real estate market. Mortgage foreclosures are a multiple-step process, presenting various buying opportunities. When a foreclosure sale is not successful, the lender assumes ownership and the property is now called real estate owned, or simply REO. If you are interested in purchasing an REO property, it’s important to understand several distinctions between REOs and traditional transactions, outlined below: Traditional Transaction REO Transaction Seller - is a homeowner or investor who wants the right Seller - is a lender, represented by an asset management price, favorable terms and timely closing. company, that wants a quick sale at or above a bottom- line price. Listing Agent - chosen by the seller. Listing Agent - assigned by the asset manager. Occupancy - the seller vacates the property on or before Occupancy - the property may be vacant, abandoned, closing. or in foreclosure limbo; eviction of former owner/tenants may be needed. Property Condition - sale-ready condition, possibly Property Condition - varies greatly. May be at risk for including upgrades to enhance its value; cash or credit at vandalism and damage; possible price reduction to offset closing for repairs. repairs. Contingencies - are negotiable and may include a Contingencies - property is offered as-is, where-is. An property inspection, the sale of current home, mortgage inspection and final walk through are allowed. approval, or final walk through. Offers - the buyer offers a sales contract, along with Offers - the buyer’s sales contract must include proof earnest money. The seller can accept, reject or of funds or pre-approval. The seller can accept, reject, counteroffer. counter, ask for highest and best offer, or make the offer subject to upper management approval. Negotiations - include price, terms, closing date and Negotiations - only includes price and closing date. contingencies. Goal is to create a win-win for the buyer Buyer is looking for a bargain; seller wants a bottom-line and seller. price and loss mitigation. Disclosures - government-mandated disclosures along Disclosures - government-mandated disclosures. No with a seller’s disclosure. seller’s disclosure, unless defects were found in prior inspections. Closing - is negotiable; seller may agree to extend. Buyer Closing - firm closing date, with per diem charged for late can specify title company. closing. Seller specifies title company. Each of these factors has important implications for buyers. Before proceeding, ask your Accredited Buyer’s Representative to help you understand your options and decide whether an REO purchase is right for you. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit REBAC.net.
  3. 3. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Buyer Representation What buyers should know about compensation, loyalty and shared expectations. Most real estate agents earn their living by Agency relationships are based on mutual consent, representing buyers and sellers in property so if your buyer’s representative isn’t living up to your transactions. While commission rates and/or terms expectations, you can cancel the agreement. vary from one listed property to another, there’s no Most importantly, you should discuss expectations question about which agent and brokerage firm is early on. Each buyer’s agent has their own style and representing the sellers. The yard sign alone makes preferred way of working with clients. And each agent that clear. has their own buyer’s representation agreement, However, problems can surface on the other side of outlining their obligations to you and what they expect the transaction if a buyer (intentionally or unwittingly) in return. does things that lead two different agents to believe There are also certain things buyer’s reps are not they are representing that buyer. allowed to do for you, such as advise you on which Examples include: neighborhoods are better than others in terms of • A buyer has been searching for homes with schools, crime rates or population demographics. Fair an agent’s help. On impulse, he attends Housing Laws state they can only point you to sources an open house and starts talking to the of this information, helping you make your own hosting agent about what kind of home he decisions on these and other matters. is searching for, failing to mention that he is Taking time to discuss shared expectations at the already working with another agent. beginning of your relationship is the surest way • A couple, early in their home search, to avoid misunderstandings and form a strong notice two different houses for sale with partnership—one that allows your buyer’s rep to serve two different agents. They call each agent, you to their greatest ability and help you achieve the asking to see the homes. best possible result in your home purchase. In each of these cases, a buyer has demonstrated purchasing interest with more than one real estate agent. Depending on other details of the circumstances—and how your state defines the way agency relationships are formed—it is possible that a dispute could arise between agents regarding who should receive a commission if the buyer proceeds with a purchase. This is one reason why it’s in everyone’s best interest, including yours, to shop for an agent before you shop for a home, and to formalize your relationship with a signed buyer representation agreement. Buyers have nothing to lose, because you can expect a higher level of service, typically for no additional cost. In return for providing these services and assisting you with various transaction details, buyer’s agents expect 1 Note that not every state requires a signed Buyer’s Representation you to remain loyal to them, making it clear to any Agreement to create an agency relationship. In some cases, an other agents that you are already being represented. agency relationship can be formed if both parties simply behave as if one exists. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit REBAC.net.
  4. 4. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Am I ready to buy a home? Your buyer’s rep can help you decide. The decision to purchase a home is a highly personal one, based on both tangible and intangible factors. Beyond your personal situation, local market conditions, financing costs, and future expectations must also be evaluated. The following list of questions can help you decide if you are ready to move forward with a home purchase. Your Accredited Buyer’s Representative (ABR®) can help you sort through these issues and provide essential local market perspectives. PURCHASING CONSIDERATIONS F Are local market prices favorable to purchasing? F If you purchase a home, how long do you expect to What are your expectations on future prices? live there? F Do you qualify for any special purchasing F What can you afford to pay each month for housing- assistance programs that can help reduce the cost related expenses? of home ownership? F What are the total costs of home ownership? RENTING CONSIDERATIONS This may include: F If you are now a renter, what are your total • Mortgage payments (based on various interest rate and term assumptions) housing expenses? (monthly rent, utilities, housing assessment, parking, etc.?) • Property taxes • Homeowner’s insurance F How does renting vs. buying factor into your long-term • Utilities investing goals? • Maintenance costs OTHER FACTORS • Any other special fees? F What are your personal preferences regarding the F Do you expect these housing-related expenses to type of housing you wish to live in? How does location increase or decrease? (changes in interest rates may factor into your housing preferences? be a bigger factor than others) F How do you expect your personal situation to change, F What additional expenses are required to complete a in terms of future housing needs? purchase? (closing costs, moving expenses, etc.) F What are your expectations concerning future F How much will your home ownership costs decline employment? after adjusting for interest expense deductions and F What are your long-term personal and financial goals, property taxes (if applicable)? with regard to housing? The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.
  5. 5. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD From Contract to Closing Congratulations! A seller has accepted your offer. Before you can take possession of your new home, however, several important details must fall into place. Count on your Accredited Buyer’s Representative (ABR®) to explain each step in the process and answer your questions. While each transaction is unique, the most important steps include: COMPLETE A HOME INSPECTION GET READY TO MOVEy’s Assuming this contingency was in your offer, schedule Moving may be the biggest job you face in buying a a thorough inspection of the property with a qualified home. Be sure to get a jump on these preparations. home inspector. If you like, your ABR® can help you First, decide how much help you’ll need. If you plan identify several inspectors to choose from. to hire a moving company, compare costs and make a The inspector should provide you with a written report reservation. detailing any flaws found in the home, including Other important details include coordinating dates to information about the severity of his or her findings. If end service with all utilities and establish service in your severe problems are found, your contingency clause new home. Make sure the post office has been notified should permit you to cancel the contract without of your change in address, as well as your bank, credit obligation. card companies, insurance agent, attorney, other key Alternately, you may want to negotiate performance professionals, and family and friends. and payment for any significant repairs noted in the ATTEND A FINAL WALK-THROUGH inspection. But also remember that no home is perfect and small repairs and maintenance issues should A pre-closing walk-through is a final check to ensure not derail the transaction or require another round of that the home is in the same condition it was during the negotiations. inspection, and to make sure all contracted items, such as appliances, are still in the home. The timing of the REQUEST ATTORNEY REVIEW final walk-through will vary, depending on practices in If specified in your offer, ask your attorney to review your market. your sales contract and, if desired, schedule his or her PREPARE TO PAY CLOSING COSTS participation in your closing. When you applied for your mortgage, you received FINALIZE YOUR MORTGAGE a good-faith estimate of closing costs. As closing Securing a mortgage can be more complex and approaches, you’ll need to determine exactly how much expensive than many consumers realize. Numerous money you will be expected to bring to closing and what documents and details must come together in a short forms of payment are acceptable. period of time. Make sure you have promptly supplied your lender with everything they ask for so your financing is in place for closing day. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.
  6. 6. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Moving Checklist Moving into your new home is a big job. The further you plan in advance, the smoother it will go. This list contains most of the big tasks you’ll need to do and suggested timeframes. Depending on your situation, you might be able to delete (or may need to add) some items. 8 WEEKS BEFORE o Notify utility companies of date to discontinue/transfer o Call moving companies for estimates. service and/or establish service at your new home. Also o Remove and dispose of unnecessary possessions. arrange for final readings and bills, including refunds on prepaid services. o Start compiling an inventory of your possessions. o Electric o a floor plan (with room dimensions) of your new home Get to help you decide which furnishings you want to keep and o Heating oil which room they will go in. o Internet service o Start a file of moving-related papers and receipts. o Natural gas o Locate schools, healthcare professionals and hospitals in o Telephone your new location. o Television o Arrange to transfer your children’s school records and o Trash collection family medical records. o Water o Notify your state’s department of motor vehicle of your 6 WEEKS BEFORE new address. o Secure off-site storage. o moving from an apartment, arrange for refund of your If o Choose a mover and sign contract. security deposit. o Contact your homeowner’s insurance agent about o Discontinue additional home services (housekeeper, coverage for moving and secure more. gardener/lawn service, snow removal, and pool cleaner). o Contact insurance companies (auto, homeowner’s, medical, o Start using up things you can’t move, such as perishables. and life) to arrange for coverage in your new home. 3 WEEKS BEFORE 4 WEEKS BEFORE o Make travel plans. Create a file of important papers, such as auto license, o Make arrangements with condo or homeowner’s registration documents and title; any medical, dental association to reserve elevator usage time if moving into or and school records; birth certificates; wills, deeds, stock out of a high rise building. certificates, and other financial documents. o Arrange to close existing bank accounts and open new o Notify the following of your change of address: accounts in new area. o Post office o Arrange for child care on moving day. o Banks o Credit card companies 2 WEEKS BEFORE o Relatives and friends o Arrange special transport for your pets and plants. o Insurance agent, lawyer, tax/financial advisor o Contact your moving company and review arrangements o Magazine subscriptions for your move. 1 WEEK BEFORE o Pack moving-essential boxes—important documents, travel clothes, personal items and prescription medications. 2–3 DAYS BEFORE o Confirm all final arrangements with your mover and other service providers. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.TBRREBACNewsletter_Oct2011_round2.indd 7 10/11/11 12:22 PM
  7. 7. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFDFair Housing Quiz Fair Housing and Your Buyer’s Rep Continued from page 57. The Equal Professional Service Model involves all of the following key guidelines except 10. Looking at the following four marketing examples, identify which one is okay under Article 10 of the Code The Federal Fair Housing Act, enacted in 1968, is designed to prohibit discriminatory A. Have I offered a variety of choices? of Ethics? practices when buying and selling homes. Administered by the U.S. Department of A. Advertise only in a strategically limited geographic B. Is my client working with another agent? area that is populated by a particular ethnic group Housing and Urban Development (HUD), the law prohibits housing discrimination against C. Has my customer set the limits? of people. seven protected classes—race, color, sex, religion, national origin, familial status and/or D. Do I have objective information? B. Limit advertising to small papers which cater physical and mental handicaps. to particular religious groups of people.8. When a prospect inquires about the racial makeup of neighborhoods or schools, you should respond by saying: C. Promote a listing only in selected sales offices in communities with similar ethnic populations. Fair Housing marked a significant step forward in protecting civil rights for all A. “I believe the neighborhood has a few Hispanic D. Advertising your knowledge of a language other than English in an English-language people. The law covers most types of housing, and includes compliance guidelines families. I can check and get back to you.” advertisement. for landlords, property managers, builders and real estate agents. The chief concern B. “The Fair Housing Act prohibits me from providing that kind of information. I recommend for buyer’s reps is that they not engage in steering, the act of directing home buyers you contact the school district, municipal government, or the local library.” 11. In an advertisement for a small, two-bedroom house in a neighborhood where many families live, which of the (or tenants) to a particular area that is chosen by the agent, not the buyer. C. “I wouldn’t worry about that, the neighborhood following language is clearly improper under the Fair is safe and the schools are good.” Housing Act? How do Fair Housing laws affect your from making choice-limiting decisions or ruling out home search? certain properties or neighborhoods based on factors D. “Residents in this neighborhood value diversity, A. Small, cozy home in quiet neighborhood Many home buyers want and expect their buyer’s rep to that are important to them. If you prefer a particular you’ll fit right in.” B. Two-bedroom home, near playground and help them make good choices in their home purchase. neighborhood, that is your choice, and you can share senior center these preferences with your buyer’s rep. Consumers know that real estate agents are intimately9. If a seller using a real estate agent refuses an offer because of the buyer’s national origin, who may file a C. Ideal for couple or single professional familiar with certain neighborhoods, so it’s logical that buyers would seek out their professional advice. Ultimately, Fair Housing is designed to help all buyers D. No children federal lawsuit against the seller? achieve the dream of home ownership on their own However, your buyer’s rep may not be allowed to answer terms. By researching neighborhoods that interest A. The prospective buyer B. The real estate practitioner 12. Which of the following features are required in ground floor units of non-elevator multifamily building of four all of your questions, including questions about whether a neighborhood is safe, or the racial composition of an you, and giving serious consideration to your needs and preferences, you will be able to make a smart, units or more built after March 1991? area, or whether the schools are good. Instead, buyer’s informed home purchase—one you can enjoy for C. The federal government reps are instructed to direct you to helpful sources of many years to come. D. All of the above A. An accessible building entrance or an accessible route for persons in wheelchairs information so you can evaluate neighborhoods on your own. B. Accessible and usable public and common use areas This is because, under the Fair Housing law, it is C. Light switches, electrical outlets, thermostat, unlawful for an agent to engage in any conduct that and other environmental controls in is discriminatory towards any of the seven protected accessible locations classes. Whether a neighborhood is safe, for example, is a subjective decision. Your buyer’s rep can suggest D. All of the above the best Web sites and other resources to gather related facts. But ultimately, buyers must form their own Answers and related details are posted on the opinions about whether a home or a neighborhood ABR® Network. is desirable to them. Reprinted from REALTOR® Magazine Online by permission of It’s a buyer’s choice. the NATIONAL ASSOCIATION OF REALTORS® . Copyright 2011. All rights reserved. A real estate professional should never steer you toward or away from a particular neighborhood if the homes there fit your needs and are within your range of affordability. However, there is no law restricting buyers The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR).6 TBR • April 2011 To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.
  8. 8. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Evolution of Buyer Representation Even though buyer representation is now largely available to home buyers across the country, it wasn’t always so. As an advocate for home buyers, the Real Estate Buyer’s Agent Council (REBAC) has played a key role in creating that change and helping buyers receive the same level of representation in real estate transactions that was previously only enjoyed by sellers. Prior to the introduction of buyer representation (also called buyer agency), only sellers were represented in real estate transactions and received full fiduciary responsibilities from their agent, including loyalty, obedience, disclosure, confidentiality, reasonable care and diligence, and accounting. Buyers were brought into a transaction with assistance from licensees who treated buyers as customers, not clients, because they were acting as agents or sub-agents for the seller. Buyer representation aims to level the playing field by offering full fiduciary responsibilities to buyers, typically by signing a buyer representation agreement. Details vary from state to state regarding how agency relationships are established. KEY MILESTONES IN THE EVOLUTION OF BUYER REPRESENTATION INCLUDE: 1988: REBAC is founded by Barry Miller, a Denver- 1996: The National Association of REALTORS® acquires based REALTOR®. The organization supports buyer REBAC and steps up efforts to advocate for changes in representation through advocacy and training, awarding real estate license laws and agency practices. the Accredited Buyer’s Representative (ABR®) designation to agents who pass certain education and experience By effecting substantial changes to the REALTOR® requirements. Code of Ethics, the National Association of REALTORS® has helped transform the way real estate brokerage is Mid-1990s: Public interest in buyer representation grows. conducted across the country, ultimately providing better REALTOR® associations lobby for changes to many state’s service to real estate home buyers. real estate regulations, away from sub-agency towards direct representation of buyers. REBAC continues to serve home buyers by providing valuable information resources on the buying process and helping connect home buyers with qualified buyer’s representatives. You can learn more about buyer representation by asking your Accredited Buyer’s Representative or visiting REBAC.net. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.
  9. 9. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Property Disclosures Buying a home can present hidden risks. While sellers must provide prospective buyers with complete and accurate descriptions of properties for sale, each state varies regarding the details sellers must legally disclose to buyers. No matter where you live, smart buyers also exercise personal responsibility, to whatever extent possible and reasonable, to help avoid unpleasant surprises. The following list outlines numerous issues buyers should consider when purchasing property. Some are addressed by sellers’ disclosure documents, others are not. Your buyer’s rep can counsel you on the specifics in your state and discuss appropriate steps to discover and remedy potential property concerns. HOME CONDITION—STRUCTURAL OTHER CONDITIONS LEGAL /FINANCIAL CONSIDERATIONS ✦ Roof ✦ Termite or other pest infestation ✦ Possible or probable short saleS ✦ Foundation ✦ Flooding (including federally- or foreclosure ✦ Interior/exterior walls designated flood plain*) ✦ Violation of building codes, zoning ke ✦ Fireplace/chimney ✦ Utility or other easements ordinances or other restrictive es ✦ Floors ✦ Adjoining private roads (and covenantsms ✦ Windows/doors obligation to maintain) ✦ Zoning (restricting buyer’s intendednd ✦ Ceilings ✦ Shared driveways, walls, use for the property)yer ✦ Garage or encroachments from or on ✦ Homeowners association obligations ✦ Patio/deck adjacent property ✦ Tenancies, judgments or tax liens ✦ Stigmas (including registered ✦ Proposed assessments or zoning HOME CONDITION—MECHANICAL sex offenders) changes ✦ Plumbing system ✦ Mechanics’ or materialmens’ liens e ✦ Electrical system OFF-SITE CONDITIONS ✦ Heating and/or air conditioning Odor, smoke, noise, and hazards OTHER OFF-SITE CONSIDERATIONS ✦ Sewer and/or septic system affecting property due to proximity to: ✦ Neighborhood noiseir ✦ Built-in appliances (e.g., barking dogs) ✦ Highways ✦ Other systems and fixtures ✦ Traffic ✦ Railroads ✦ Safety ENVIRONMENTAL HAZARDS ✦ Commercial/industrial facilities ✦ Availability of, or consequences ✦ Asbestos ✦ Military installations from, public parking ✦ Lead-based paint* ✦ Superfund sitesof ✦ Zoning (impacting how nearby ✦ Meth lab ✦ Toxic waste dumps property will be used in the future) ✦ Mold ✦ Radon PREVENTIVE MEASURES Buyers can take steps to reveal problems and reduce Home Warranties: Home protection plans can cover the risk. Ask your buyer’s rep about the following options cost of future repairs to malfunctioning home appliances and other appropriate measures. Inspections and or systems. Policy coverage and costs vary. other preventive steps are especially important for distressed properties. C.L.U.E. Reports: Comprehensive Loss Underwriting Exchange Reports provide details on insurance claims Home Inspections: A thorough home inspection should filed in the past five years, such as wind, water or mold reveal structural or mechanical issues. Certain problems damage—considerations that could impact the cost of may require a separate evaluation by a trained specialist. insuring the home. *These items are subject to federal laws and must be disclosed in all states. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.
  10. 10. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFDs 5 Reasons to Signe a Buyer Representation Agreement If you’ve started looking for a home—and a real estate professional to assist you—your buyer’s representative may ask you to sign a Buyer Representation Agreement. What is this form? Why should you sign it? A Buyer Representation Agreement is a legal document that formalizes your working relationship with a particular buyer’s representative, detailing what services you are entitled to and what your buyer’s rep expects from you in return. While the language used in the document is formal, homebuyers should view it as an important and helpful tool for clarifying expectations, developing mutual loyalty, and most importantly, elevating the services you will receive.ren 1. Receive a higher level of service. If you’ve 3. Avoid misunderstandings. A Buyer’s Representation formalized an agency relationship with a buyer’s rep, Agreement clarifies expectations, helping you you can expect to be treated like a client instead of a understand what you should and shouldn’t expect customer. What’s the difference? Clients are entitled from your buyer’s rep, and what they will expect from to superior services, relative to customers. While the you, which usually centers on loyalty. details vary from state to state, and from one buyer’s agent to another, you can generally assume that 4. Agency relationships are based on mutual consent. being a client means that you’ve formed a fiduciary, While most representation agreements specify or agency, relationship with your buyer’s rep.1 a time period, they can be terminated early if both parties consent. Most buyer’s reps are willing to e 2. Get more without paying more. In almost every case, end the agreement early if the working relationship h home sellers have already agreed to pay a buyer’s isn’t going well. Some buyer’s reps also offer d agent’s commission. If they haven’t, you can ask your representation agreements for as little as one day,g buyer’s rep to avoid showing you any such homes. for the purpose of giving both parties a brief trial rs Or you can still view the home, knowing that you’ll period to explore working together. need to factor your agent’s commission into any offer you may write. While buyers rarely pay real estate 5. Strength as a team. When you and your buyer’s commissions, this is an important detail you’ll want rep work together within a formalized agency to discuss with your buyer’s rep and clarify in their relationship, you have created a team dedicated representation agreement. to helping you achieve the best possible home-buying experience.nd,r 1 Note that not every state requires a signed Buyer’s Representation Agreement to create an agency relationship. In some cases, an agency relationship can be formed if both parties simply behave as if one exists. in The ABR® designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various homebuyer resources, please visit www.REBAC.net.
  11. 11. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD The Negotiating Process You’ve found a home that’s right for you and it’s time to make an offer. What steps are involved in negotiating a real estate purchase? STEP 1. RESEARCH AND PLANNING STEP 3. THE SELLER’S RESPONSE Depending on market conditions, you may have to act When your offer is presented, the seller’s options are to: quickly, before another buyer steps ahead of you. That said, the best way to approach a home purchase is to arm Accept. If, after reviewing your written offer, the sellers yourself with facts and to plan a negotiating strategy. Your sign their unconditional acceptance, then you will have a ABR® can assist you on both these points. binding contract as soon as you are notified of the offer’s acceptance. When deciding what to offer for a property, current market prices are the most important factor. Your ABR® can Reject. If the sellers reject your offer, you are released provide valuable assistance in this regard—counseling of any obligation. The sellers cannot later change their you on market conditions, price ranges, comparable minds and expect to bind you to a contract based on properties, and appropriate negotiating strategies. that offer. STEP 2. SUBMIT AN OFFER Counteroffer. If the sellers like most aspects of your offer, Real estate transactions require a written contract, which they may present a written counteroffer that includes conveys an initial written offer. A check for earnest money the changes the sellers want to make. You are then free usually accompanies an offer. to accept their counteroffer, reject it, or make your own counteroffer to their counteroffer. This process can repeat Your offer will specify price, plus all the terms and itself as many times as it takes for you and the sellers to conditions of the purchase you want to negotiate. Your agree on the sales contract. At this point, negotiations are ABR® provides a valuable service by helping you use over and the terms of the sale are final. standard forms that are kept up-to-date with changing real estate laws, which vary from one state to another, and It is important to note that the negotiating process always by explaining the negotiating impact of including various moves forward; buyers cannot decide at a later time terms and conditions. to accept a counteroffer that they previously rejected. If the property is still available, buyers must reinitiate negotiations by submitting a new offer. WITHDRAWING AN OFFER Can you take back an offer? In most cases the answer is yes, right up until the moment your offer is accepted. 1. Re se and Parch lannin In some cases, you can withdraw an offer before you’ve g been notified of its acceptance. 2. Su b m an Offe it If you want to withdraw your offer after acceptance, r be sure to do so only after consulting a lawyer who is 3. Th e experienced in real estate matters. You want to avoid Re spoSe lle r’s nse losing your earnest money deposit or a lawsuit for damages the sellers incurred because of your actions. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various home buyer resources, please visit www.REBAC.net.
  12. 12. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Customer or Client?ge What’s the difference? In real estate transactions, buyer-clients are entitled to a higher level of service than buyer- customers. Becoming a client typically involves signing a Buyer Representation Agreement with a buyer’s representative, who then owes you fiduciary duties. This means that your buyer’s rep is expected to exercise discretion when acting on your behalf, including adhering to very specific responsibilities, obligations, and high standards of good faith and loyalty. For example, if you’re a client, a buyer’s agent will seek If, however, you are only a customer, a buyer’s rep may to negotiate the most favorable transaction terms for not be in a position to answer even basic questions, you—and will not disclose any material facts about your such as “Why are they selling?” or “Is this home pricede situation that could hurt your negotiating position. competitively?” This is because they are acting insteade as a sub-agent for the seller.ts YOUR SERVICES WILL VARY, DEPENDING ON YOUR STATUS. If you are a CUSTOMER If you are a CLIENT (no fiduciary relationship), an agent will: (fiduciary relationship), your agent will: Maintain loyalty to the seller’s needs Pay full attention to your needs Tell the seller all that they know about you Tell you all that they know about the seller Keep information about the seller confidential Keep information about you confidential Focus on the seller-client’s property Focus on choices that satisfy your needs Provide just the material facts Provide material facts as well as professional advice Only provide price information that supports Provide price counseling based on comparable the seller’s listing price properties and their professional insights Protect the seller Protect and guide you Negotiate on behalf of the seller Negotiate on your behalf Attempt to solve problems to the seller’s advantage Attempt to solve problems to your advantage and satisfaction and satisfaction * Note that not every state requires a signed Buyer’s Representation Agreement to create an agency relationship. In some cases, an agency relationship can be formed if both parties simply behave as if one exists. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various homebuyer resources, please visit www.REBAC.net. TBR • February 2010 7
  13. 13. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD What Do You Want and Need in a Home? Finding a new home can be exciting. But deciding Most homebuyers invariably face trade-offs. Your what you truly want and need—and can afford—can buyer’s representative can play a key role in helping be challenging. Making these decisions begins with you sort out your options. He or she can also offer setting priorities among many different preferences. important insights specific to your local market. Here are many of the considerations you’ll want to discuss with your buyer’s rep: Basic Home Features Neighborhoods/Location Related Costs F Do you prefer a single-family F Commuting considerations F Homeowner association fees? detached home, townhome, (to work, shopping, etc.) F Property taxes condominium, or other type F Proximity to desirable features of property? (such as a community center, Trade-offs F Desired number of bedrooms exercise facility, school, hospital, etc.) F How much do you want to invest and baths F Views—how important is to find in a home beyond the purchase F Preferences regarding kitchen, your ideal view (overlooking a park, price, either financially or in terms dining, family rooms, etc. and for example) or avoiding a bad one of sweat equity, if you can’t find preferred home layout (a busy highway)? exactly what you want? F High-priorityhome features, F Areyou willing to consider other such as kitchen appliances, Lot Characteristics neighborhoods that provide fireplace, etc. F Sizeand shape, including back, better affordability? front and side yards F Other types of rooms needed F Landscaping considerations—the Resale (e.g., a home office or a hobby space) need for open play areas, privacy, F How long do you plan to live in patio space, decking, etc. this home? How does this impact F Storage spaces (closets, the type of home you will buy, basement, an outdoor shed, etc.) F Home orientation—is it important how much you’ll spend, and your for your home to face a particular choice of location? F Need for a garage or direction? parking space, and if so, for how many cars? Life at Home F If you’ll be sharing your home Other Home Preferences with children, pets, live-in parents F Ranch, two story, split level, etc. or others, how does this impact your housing preferences? F Age and style of home Both now, and in the future? (Victorian, bungalow, modern, etc.) (For example, pets may require a F How important is energy fenced-in yard; older parents may efficiency or other green dictate one-floor living.) home features? F Proximity to neighbors The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various homebuyer resources, please visit www.REBAC.net. TBR • February 2010 7
  14. 14. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFDForeclosure DisclosureContinued from page 55.Are there exceptions to Successful buyer’s reps know the reporting cycle and monitor the results. That’s why this is such an important issue today. But knowledge and experience Alternative Buying Options the rules?Even though REOs and short sales are They understand that an offer that was turned down a few weeks ago might be gained now, while foreclosures are more common, will still be valuable when they Is a distressed property right for you?nontraditional transactions based on accepted in the wake of a price reduction are again the rarity we all hope they willvery specific and unique rules, it is made in response to the latest MMR. soon become.also true that there are occasional Distressed sales are a sad fact of the real estate it’s important to learn all you can about distressedexceptions to the rules. Never say never. Today’s Lessons = Future Benefits Unfortunately, distressed sales areFor example, even though a property market. While no one wants to see a homeowner properties—and to work with a qualified buyer’s Real estate business will of course always going to happen. So developing ais offered “as is/where is,” it is possible thorough understanding of the transaction lose their home, these properties also present representative who can guide you through each stepthat the seller may make repairs, but this continue to be conducted in the traditional way. But until local markets will only serve to make you a better unique opportunities for buyers. To determine of these complex, non-traditional transactions.could come at a price. buyer’s rep. Now and in the future. across the country stabilize, a thorough whether you are a candidate for such a purchase, understanding of what I call the new6. Know your market— really know it normal is essential for everyone involved in today’s real estate industry. While Educate Your BuyersWhen foreclosed properties are a small the points outlined here are far frompart of the overall inventory, keeping a Many consumers are interestedfinger on the pulse of these transactions comprehensive, they provide a start in exploring distressed Foreclosure is a process, with buying opportunities at each stage: towards that understanding—and towardsisn’t pressing. But in markets like mine, helping your buyer-clients benefit from properties as a possible pathit’s imperative. these new conditions. to home ownership, but not Stage 1. Pre-foreclosure – Questions to ask yourself: Next Steps all buyers are good candidates.Lenders usually give their asset managers With so much of the inventory comprised a period of time that begins with the Your buyer’s representative can give Your buyer’s representative cana window for negotiation within several Our latest one-sheet, on of distressed properties, it would be a initial mortgage default and ends when you specific guidance based on your assist you further in answering thesepercentage points of a property’s the following page, can help the distressed property is sold. situation and the type of distressed and other questions which will help disservice to your buyer-clients—perhapsdetermined asking price. But that asking even a breach of fiduciary responsibility— facilitate a conversation property you want to purchase. But for you determine whether this path toprice often changes in response to the if you didn’t investigate these properties on this topic. Stage 2. Foreclosure sale – starters, consider these questions: homeownership is right for you.Monthly Market Report (MMR). for them. when the property is auctioned to the highest bidder, someone who also F Are you flexible on timing? Can meets the terms of the sale. you make a quick decision and/or accommodate months of possible Stage 3. REO (real estate owned) – delays? Is your purchase limited by any Deepest Foreclosure Discounts if a foreclosure sale is not successful, F property ownership is transferred to contingencies, such as needing States with the largest percent of savings based on February 2010 average sales price vs. average foreclosure sales price. the lender. to sell your current home first? F Have you already secured What is a short sale? financing? This is a situation in which a Illinois seller owes more on their loan than F Do you have resources to repair and rehab the property, if needed? Kentucky a sale of the property will produce, and they are unable or unwilling F If you are buying the property for Ohio to make up the difference at closing. investment purposes, what is Louisiana The seller may or may not be in your action plan? Do you intend pre-foreclosure. Banks may to rent or resell? Or perhaps New Jersey consider a short sale to a new inhabit the property until market Tennessee buyer to reduce their losses. conditions improve? District of Columbia Pennsylvania Delaware Mississippi Source: ReatyTrac 0% 25% 50% The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various homebuyer resources, please visit www.REBAC.net.6 TBR • May 2010
  15. 15. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Why Work with an Accredited Buyer’s Representative? Buying a home may be the largest and most complex financial transaction you ever undertake. If you’re ready to buy a home, wouldn’t you prefer to work with the most qualified real estate professional you can find? An Accredited Buyer’s Representative stands out in the crowd. If your REALTOR® holds the ABR® designation, you can trust that they have the extra edge when it comes to KNOWLEDGE AND EXPERIENCE. Why? The ABR® designation is only You can expect your ABR® to: Not all buyer’s representatives awarded to licensed real estate • Understand your specific needs are equal. Only a buyer’s rep who professionals who complete and wants, and locate appropriate has earned the Accredited Buyer’s specialized training that gives properties Representative designation has made them the edge in understanding a • Assist you in determining how the extra effort to raise the bar, with buyer’s perspective and protecting much you can afford (pre-qualify additional training and experience. and promoting their buyer-clients’ your mortgage) If you work with an ABR®, you can feel interests. Before earning the ABR® confident that you’ll receive the highest • Preview and/or accompany you designation, buyer’s reps must also level of buyer-representation services. in viewing properties demonstrate proven experience in representing buyers. Further, they • Advise you in formulating your offer The ABR® designation is awarded are committed to maintaining their • Help you develop your negotiating by the Real Estate Buyer’s Agent professional edge by staying current strategy Council (REBAC), a wholly-owned on the latest issues and trends in subsidiary of the National Association • Provide a list of qualified vendors buyer representation. of REALTORS® (NAR). (inspectors, attorneys, lenders, etc.) for other services you may need When you work with an ABR®, you’ll be served, not sold. Your interests • Keep track of every detail throughout become their interests. They’ll the transaction—to closing and make your home buying experience beyond go as smoothly and successfully as possible. The ABR® designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a wholly-owned subsidiary of the National Association of REALTORS®. To learn more about REBAC and access various homebuyer resources, please visit www.REBAC.net.
  16. 16. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD Final Walk-through Checklist GENERAL APPLIANCES ■ Have all agreed-upon repairs been completed? Do all appliances included in the home operate correctly? ■ Has the associated paperwork been submitted? ■ Refrigerator ■ Have the sellers removed any contents that are ■ Dishwasher supposed to stay? ■ Stove, cook-top, oven, microwave ■ Is the home relatively clean and ready for new occupants? ■ Garbage disposal ■ Other specialized kitchen appliances (e.g., warming drawers, wine coolers, trash compactors) WALLS, CEILINGS AND FLOORS ■ Exhaust fans (kitchen and bath) ■ Are there signs of new damage? (water damage, gouges, stains, etc.) ■ Heaters (bath) ■ Ceiling fans ELECTRICAL ■ Do all light fixtures work? HVAC ■ Does every outlet have power? ■ Test the furnace and/or air conditioning system ■ Are any vents blocked? PLUMBING ■ Test each faucet. (On/off? Water pressure? EXTERIOR Hot/cold water?) Has there been any damage to: ■ Check under sinks for leaks ■ exterior walls or roof? ■ Do all toilets flush properly? ■ driveway? ■ Are any drains clogged? ■ landscaping? ■ other structures on the property? WINDOWS/DOORS ■ Do all windows open, close and lock properly? ■ Do they all have screens (if applicable)? ■ Do all exterior and interior doors open and close properly? ■ Do the locks work? ■ If there’s an electric garage door, is it operational? ■ Do all cabinet doors/drawers open/close? The ABR® designation is awarded by the Real Estate BUYER’S AGENT Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various homebuyer resources, please visit www.REBAC.net.
  17. 17. DocuSign Envelope ID: EE1E4BC1-5505-4875-98CD-CFF3D889BAFD 5 Steps to Obtaining a Mortgage Today’s stricter lending environment means that processing a mortgage 2. DISCUSS YOUR OPTIONS 4. GET PREAPPROVED application is more complex than Deciding what type of mortgage Completing a loan application with ever, given the number of steps that is best for you depends on your one or more lenders will help confirm lenders, underwriters, and mortgage personal situation, your financial whether your intended mortgage insurers must all complete before scenario, and your future plans. financing plans will work out as home buyers truly have their financing For example, if your down payment hoped, or if you must modify your in place. isn’t large enough to qualify for plans. It’s important to understand a conventional loan, an FHA since preapprovals are contingent To help ensure the process goes mortgage can be an excellent option. upon the lender receiving full smoother, you can also take steps of Alternately, you may qualify for an documentation, your preapproval your own. It’s a good idea to discuss attractive program offered at the does not guarantee that you have a the process with your Accredited national or local level. Mortgage mortgage. Still, it’s an important first Buyer’s Representative (ABR®), programs are always changing, so ask step that will also put you in a better even before shopping for homes. By your ABR® about current options. negotiating position with sellers. planning ahead, you’ll be in a much better position to negotiate and move 3. INTERVIEW LENDERS 5. COMMIT TO A LENDER forward on a purchase—and avoid ® Your ABR can provide several As soon as you are under contract to any unpleasant surprises regarding recommendations, based on past purchase a home, commit to working your mortgage. home buyers’ experiences. Rates with one lender to complete your and fees are typically very competitive mortgage application. You will probably 1. EVALUATE AFFORDABILITY between lenders, so it’s often more be charged a fee at this point because Lenders and mortgage insurers look important to focus on other factors, this is when the lender starts incurring at a variety of factors, but the two including the level of service provided processing expenses on your behalf. most important are your monthly and how well they’ve executed Show your lender that you are serious mortgage payment and your total debt transactions for other buyers. The about working in partnership with load, relative to your gross income. type of mortgage you are seeking them by submitting all the required As a home buyer, it’s also important may also impact your choice of documentation as quickly as possible. to consider additional expenses, lender, since some are more familiar beyond your mortgage payment, that with certain mortgage programs Following these five steps will greatly can impact how much home you can than others. improve your results in getting a afford. Depending on your situation, mortgage. Count on your ABR® to these other expenses could include provide more detailed information on property taxes, mortgage insurance, each step in the process and answer homeowners insurance, home any questions you may have. maintenance expenses, homeowner association fees, parking expenses, and utilities. The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR). To learn more about REBAC and access various homebuyer resources, please visit www.REBAC.net.

×